WASHINGTON (dpa-AFX) - Crude oil futures settled lower on Wednesday as worries about energy demand and excess supply in the market resurfaced and pushed down prices.
Reports showing spikes in new coronavirus cases in the U.S. and China, have raised concerns the global economy may take longer time to be well and truly on the recovery path.
The Federal Reserve chairman Jerome Powell, while testifying before the Senate Banking Committe on Tuesday, cautioned that 'significant uncertainty remains about the timing and strength of the recovery.'
West Texas Intermediate crude oil futures for July ended down $0.42 or about 1.1% at $37.96 a barrel.
Brent Crude futures were lower by $0.35 or 0.8% at $40.61 a barrel.
According to the data released by the Energy Information Administration (EIA) this morning, crude inventories in the U.S. rose by 1.2 million barrels last week to a record 539.5 million barrels.
The EIA report showed gasoline stockpiles saw a draw of about 1.66 million barrels last week, after falling by 866,000 barrels a week earlier. Meanwhile, distillate stockpiles were down 1.35 million barrels in the week, against expectations for an increase of 2.4 million barrels.
The EIA report also said oil production in the U.S. was down by an estimated 10.5 million barrels per day. That was down 20% from record highs achieved about three months ago.
A report from OPEC, released earlier in the day, said there will be room for its members to ease their production constraints later in the year. The OPEC report says global demand for crude may rise 27.8 million barrels a day in the third quarter and to 31.2 million barrels per day by the final quarter of this year.
Meanwhile, in news about coronavirus infections, Beijing reported 31 new cases of novel coronavirus for June 16, four more than the day before and taking the total number of cases to 137 in six days.
Elsewhere, South Korea confirmed 43 more coronavirus cases in 24 hours, Brazil reported a record 34,918 new infections and India registered over 10,000 new Covid-19 cases for the fifth day in a row, while new coronavirus infections hit record highs in six U.S. states on Tuesday.
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